The Stock Superstars Report illustrates how to build and ...€¦ · of automotive aftermarket parts, tools, supplies, equipment and accessories in the U.S. The com-pany sells its

After performing the monthly portfolio review, one SSR holding met the portfolio sell rules and is being removed: A.O. Smith Corp. (Group 1: AOS).

To keep the SSR tracking port-folio at 36 stocks, O’Reilly Auto-motive (Group 1: ORLY) is being added to the SSR portfolio.

As of the close on Monday, December 31, 2018, iShares DJ U.S. ETF (IYY) was down 9.6% for the month. Through December 31, the SSR tracking portfolio is down 9.7%% for the month. See page 12 for a discussion of the 2018 perfor-mance of the SSR portfolio and its different approaches.

Portfolio Deletion Alert: A.O. Smith Corp. (Group 1: AOS)

A.O. Smith delivers hot water solutions through its selection of

Volume 17Issue 1

residential and commercial water heaters, boilers and storage tanks. A. O. Smith operates through two segments: North America and Rest of World. The company’s Rest of World segment primarily consists of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas, gas tank-less and electric water heaters, as well as water treatment prod-ucts. Its North America segment manufactures and globally markets specialty commercial water heat-ing equipment, condensing and non-condensing boilers and water systems tanks. It also manufac-tures and markets in-home air purification products in China.

A.O. Smith’s business is reliant on sales to China, which account for roughly one-third of its total

sales, and new home sales. The ongoing trade dispute between the U.S. and China has reduced the visibility of the company’s sales and earnings. Fur-thermore, there are signs that the U.S. housing market is slowing down, creating additional headwinds for the

company. Over the last 52 weeks, shares of

AOS have fallen more than 29%, underperforming the S&P 500 index by more than 24%. Over that time frame, the stock has also un-derperformed 64% of all U.S.-listed stocks. It also has been nearly a year since AOS shares have traded at a new high since being added to the SSR portfolio. When the stock was added to the SSR portfolio, it had risen 48% over the preceding 52 weeks and had outperformed the S&P 500 by 47%.

The weakening price momen-tum of A.O. Smith does not fit the profile for Group 1 stocks. For this reason, it is being removed from the SSR portfolio.

A portfolio addition alert was issued for A.O. Smith on December 4, 2015. The stock has risen 12.2% since purchase through December 31, 2018, while the iShares DJ U.S. ETF (IYY) has risen 21.1% over the same period.

January Portfolio Addition: O’Reilly Automotive Inc. (Group 1: ORLY)

O’Reilly Automotive passed the Group 1 screen, which looks for stocks with a history of strong and consistent annual earnings growth, quarterly earnings momentum and strong relative price strength.

O’Reilly is a specialty retailer

January 2019

The Stock Superstars Report illustrates how to build and manage a well-diversified portfolio with controlled risk. Our goal is to create a portfolio that provides investment information and reflects an approach consistent with current research findings.

www.stocksuperstars.comSSR Phone Hotline: 866-801-2576

“The American Association of Individual Investors is an independent nonprofit corporation formed in 1978 for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information and research.”

In This IssuePortfolio Alerts This Month . . . . . . . . . . . . . . . . . . . . 2Performance of SSR . . . . . . . . . . . . . . . . . . . . . . . . . . . 3SSR Stocks in the News. . . . . . . . . . . . . . . . . . . . . . . . 4Recent Earnings Announcements . . . . . . . . . . . . . . 5The Current SSR Portfolio . . . . . . . . . . . . . . . . . . . . . 6In-Depth Stock Reports O’Reilly Automotive Inc. . . . . . . . . . . . 8 UnitedHealth Group . . . . . . . . . . . . . . . 9 Toll Brothers Inc. . . . . . . . . . . . . . . . . . 10 Reinsurance Group of America . . . . . 11Portfolio Corner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Next Publication Date: February 1, 2019

2 January 2019

Stock Superstars Report

3 January 2019

of automotive aftermarket parts, tools, supplies, equipment and accessories in the U.S. The com-pany sells its products to both do-it-yourself and professional service provider customers. Its product line includes new and remanufactured automotive hard parts, such as alternators, starters, fuel pumps, water pumps, brake system components, batteries, belts, hoses, temperature control, chassis parts, driveline parts and engine parts; maintenance items, such as oil, antifreeze, fluids, filters, wiper blades, lighting, engine additives and appearance products; and accessories, such as floor mats, seat covers and truck accessories. O’Reilly stores offer various services and programs to its customers, such as used oil, oil filter and battery recycling; bat-tery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; custom hydraulic hoses;

and machine shops.Sales at O’Reilly have expanded

at an average annual rate of 7.7% over the last five years, while fully diluted earnings from continuing operations have increased by an average of 20.5% a year over the same period. Over the last seven fiscal years, the company has seen year-over-year growth in both sales and earnings.

On October 24, 2018, O’Reilly announced quarterly earnings of $4.50 per share, which beat the consensus estimate by 4.5%. At the time of this writing, the consensus estimate for the quarter ending in March is $4.07 per share, with esti-mates ranging from $4.00 to $4.20 per share. O’Reilly will report its fourth quarter results on February 6, 2019, after the market close.

There are 22 analysts providing earnings estimates for the fis-cal year ending December 2019. The mean estimate is $17.81 with estimates ranging from $18.38 to

$17.45 per share. Analysts are projecting earn-ings to grow by 10.5% this year and by 10.7% the year after. The forecasted annu-alized earnings growth rate over the next three to five years is

16.9% from four analysts.O’Reilly’s ratio of total liabilities

to total assets currently stands at 93.7%, which is above the 76.0% median value for the retailers—auto vehicles, parts and service industry, as designated by Thomson Reuters Business Classification (TRBC).

Over the last 52 weeks, ORLY shares have risen 42% and have outperformed the S&P 500 by 52%. O’Reilly has also outper-formed 92% of all U.S.-listed stocks over the last year. Over the last 26 weeks, the stock’s 26% price increase has outperformed the S&P 500 by 37% and ranks in the 94th percentile of all stocks.

O’Reilly has a market capitaliza-tion (shares outstanding multiplied by share price) of $27.4 billion, which places it in the 95th per-centile of all U.S.-listed stocks. O’Reilly is also a constituent of the S&P 500 large-cap index.

Group 1 does not have any valuation criteria or limitations,

Portfolio Alerts This Month

Published monthly by the American Association of Individual Investors 625 N. Michigan Ave., Chicago, IL 60611 312-280-0170, www.aaii.com. Annual SSR subscription, $199.

AAII’s Stock Superstars Report® (SSR) is not a registered investment adviser or a broker/dealer. This report is issued solely for informational purposes and

should not be construed as an offer to sell or the solicitation of an offer to buy securities. The opinions and analyses included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our information providers shall be liable for any errors or inaccuracies, regardless of cause, or the lack of

timeliness of, or any delay or interruptions in, the transmission thereof to the users. All information contained in this report should be independently verified with the companies mentioned.

© American Association of Individual Investors, 2019. The Stock Superstars Report is a registered trademark and service mark of the American Association of Individual Investors. This publication may not be reproduced in whole or in part by any means without prior written consent.

“The American Association of Individual Investors is an independent nonprofit corporation formed in 1978 for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information and research.”

Printed in the U.S.A.

January Portfolio Additions

Group Company (Ticker)Latest Price

(1/2/2019)Risk Index Description

1 O'Reilly Automotive Inc. (ORLY) $341.15 1.84 automotive aftermarket parts, tool & suppliesPortfolio Deletions Since Last Monthly Issue

Date Price*1 A.O. Smith Corp. (AOS) 1/4/2019 $43.47 12.2% 21.1% 12/4/2015

*Closing price on 1/2/2019.

GroupPortfolio Deletion Alert G/L Since

Purchase

iShares DJ U.S. (IYY) Change

Since PurchasePortfolio Addition Alert

DateCompany (Ticker)

2 January 2019 January 2019 33 January 2019


Stock Superstars Portfolio

iShares DJ U.S. (IYY)

December -9.7% -9.6%2018 -10.8% -5.7%2017 18.1% 21.2%2016 13.8% 12.0%2015 -3.1% 0.5%2014 4.4% 12.7%2013 44.0% 32.6%2012 16.2% 16.1%2011 4.3% 1.1%2010 19.5% 16.4%2009 34.3% 28.5%2008 -43.5% -37.2%2007 5.5% 5.8%2006 3.0% 15.3%2005 -0.3% 6.1%2004 14.3% 11.8%2003 40.2% 30.4%2002 0.5% -22.1%

From Inception 234.9% 212.3%Risk Index (3 Yr) 1.10 1.00

Std. Dev. (3 Yr) 12.5% 11.3%Performance as of 12/31/2018.

Performance

Ret

urn

Ris

k$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000

$250,000

$275,000

$300,000

$325,000

$350,000

$375,000

$400,000

$425,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Growth of $100,000

Performance of SSR

The Stock Superstars portfolio started at the beginning of 2002. The SSR portfolio is run as if managed by a subscriber and includes delays in reaction time to SSR alerts, actual commissions and bid-ask spreads. Since inception performance data is available at StockSuperstars.com.

but O’Reilly is trading with a price-earnings ratio of 22.5 based on trailing earnings per share of $15.31. The industry’s median price-earnings ratio is 12.2. A year ago, the company’s price-earnings ratio was 20.5 and the five-year av-erage is 21.7. Based on the consen-sus earnings estimate of $17.81 for the next fiscal year ending in 2019, the forward price-earnings ratio for O’Reilly is 19.3.

O’Reilly’s business model is tied closely to the number of cars on the road, the average age of these cars, the number of miles Ameri-cans drive and the unemployment rate. O’Reilly does best when the unemployment rate is low yet people are putting many miles on older cars that need more repairs.

O’Reilly Automotive is being added to the SSR portfolio because of its strong earnings growth and relative price strength.

Celgene AcquisitionShortly before we went to press,

Bristol-Myers Squibb Co. (BMY)

and SSR holding Celgene (Group 4: CELG) announced an agreement to merge. Bristol-Myers will acquire Celgene for cash and stock with an equity value of about $74 bil-lion. Under the terms of the deal, Celgene shareholders will receive 1.0 Bristol-Myers share and $50 in cash for each share of Celgene. They will also receive one tradeable Contingent Value Right (CVR) for each share owned. Each CVR will entitle its holder to receive a one-time potential payment of $9 in cash upon approval from the U.S. Food and Drug Administration (FDA) of three drugs. Based on Bristol-Myers closing price on Jan-uary 3, the deal is worth $95.12 per Celgene share, or $104.12 when including the CVR. The deal is ex-pected to close in the third quarter of this year, subject to shareholder and regulatory approval.

The Stock Superstars Report’s policy is to remove stocks of companies that have agreed to be acquired if the deal has been approved by the company’s board

of directors and the share price (almost) fully reflects the consid-eration value. As of the close on January 3, Celgene’s closing price of $80.43 is 15.4% below the con-sideration value of $95.12, exclud-ing the potential $9 value of the CVR ($45.12 for one share of BMY and $50 cash). Including the CVR, CELG shares are trading at a 22.8% discount to the consideration value.

Celgene will be held until its share price (more fully) reflects the value of the transaction, at which point a deletion alert will be issued.

SSR Portfolio PerformanceFor 2018, the SSR tracking

portfolio lost 10.8%, its poorest yearly performance since 2008. By comparison, the iShares DJ U.S. ETF (IYY) fell 5.7%. Since incep-tion, the iShares DJ U.S. fund is up 212.3%, while the SSR portfolio has gained 234.9%. For a more detailed analysis of the annual performance of the individual SSR holdings in 2018, see this month’s Portfolio Corner on page 12. •

4 January 2019


5 January 2019

AbbVie Inc. (ABBV)(12/03/2018) AbbVie announced that an investi-

gation of a monotherapy with its Bruton’s tyrosine kinase (BTK) inhibitor Imbruvica showed responses with an 89% overall response rate among 132 chronic lymphocytic leukemia of small lymphocytic lymphoma patients.

The progression-free survival rates, which were estimated for a seven-year period, indicate that the treatment with Imbruvica worked for 80% of newly diagnosed patients and 32% of refractory or relapsed patients.

(12/13/2018) AbbVie’s board of directors authorized a $5 billion increase to an existing stock repurchase program. Purchases may be made from time to time at management’s discretion. The stock repurchase au-thorization permits shares to be repurchased in open market or private transactions, has no time limit and may be discontinued at any time.

(12/26/2018) AbbVie and Lupin Limited announced a partnership to develop and commercialize a novel cancer drug for the treatment of hematological cancer. The partnership grants AbbVie exclusive global rights to develop and commercialize Lupin’s mucosa-associ-ated lymphoid tissue lymphoma translocation protein 1 (MALT1). Per the terms of the agreement, AbbVie will pay $30 million to Lupin up front and will be liable to pay an additional $947 million in future regulatory, development and commercial milestone payments. AbbVie will also be paying a double-digit royalty on sales, upon successful commercialization. Cisco Systems, Inc. (CSCO)

(12/18/2018) Cisco Systems announced that it will acquire Luxtera Inc., a privately held semiconductor photonics company, for $660 million. Luxtera uses silicon photonics to build integrated optics capabili-ties for enterprise data centers and other customers, and Cisco Systems will incorporate Luxtera’s tech across its internet-based networking portfolio. The acquisition is expected to close in the third quarter of Cisco Systems’ fiscal-year 2019, subject to customary closing conditions and required regulatory approvals.JetBlue Airways Corp. (JBLU)

(12/17/2018) JetBlue Airways reported preliminary traffic results from November. Overall traffic mea-sured in revenue passenger miles (RPMs) increased 9.7% year over year, to 4.11 billion. Consolidated capacity (or available seat miles, ASMs) expanded

10.6%, to 4.92 billion, on a year-over-year basis. The company now expects revenue per available seat mile to increase between 1.5% and 3.5% in the fourth quarter of 2018. Previous expectation was between 1% and 4%.JPMorgan Chase & Co. (JPM)

(12/26/2018) JPMorgan Chase agreed to pay $135 million to settle allegations from the U.S. Securities and Exchange Commission (SEC) that it mishandled American depositary receipts (ADRs), U.S. securities representing shares of foreign companies. According to the SEC, JPMorgan Chase improperly provided ADRs for shares not in the bank’s custody, inflating the number of a foreign company’s tradable shares between 2011 and 2015. Without admitting or deny-ing the claims, JPMorgan Chase agreed to pay a $49.7 million fine and $85.4 million in disgorgement and in-terest; the settlement is the eighth action taken as part of the SEC’s probe and joins those with BNY Mellon (BK), Citigroup Inc. (C) and Deutsche Bank AG (DB).Lam Research Corp. (LRCX)

(12/05/2018) Martin Anstice has resigned as Lam Research’s CEO and member of the board of direc-tors. Replacing him is Tim Archer, the company’s chief operating officer (COO). Archer was named president last year, a title he will retain, and has also been appointed to the company’s board.

Anstice resigned as the company investigates al-legations of misconduct in the workplace and conduct inconsistent with the company’s core values. Accord-ing to the company’s spokesperson, the alleged mis-conduct does not involve financial misconduct; it also does not relate to questions regarding the integrity of the company’s financial system controls. PACCAR Inc. (PCAR)

(12/04/2018) PACCAR announced a 14% increase to its regular quarterly dividend to $0.32 per share from $0.28 per share. The dividend is payable March 5, 2019, to shareholders of record on February 12, 2019. The stock will trade ex-dividend on Monday, February 11, 2019.

PACCAR also declared a special dividend of $2.00 per share, about a 67% year-over-year increase from last year’s special dividend of $1.20 per share. The special dividend was payable January 4, 2019, to shareholders of record on December 14. The ex- special-dividend date was Thursday, December 13.

Additionally, PACCAR’s board of directors approved

SSR Stocks in the News

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probability of success. Pfizer is evaluating next steps for the potential development of a Staphylococcus aureus vaccine.UnitedHealth Group (UNH)

(12/17/2018) UnitedHealth’s Optum unit and Da-Vita Inc. (DVA) agreed to lower the acquisition price for DaVita Medical Group—a managed care provider— from $4.90 billion to $4.34 billion. UnitedHealth agreed to buy DaVita’s managed care provider one year ago, in December 2017. Both parties agreed to the change following DaVita Medical Group’s weaker performance and desire to speed Optum’s acquisi-tion through regulatory approval. The acquisition was expected to close before the end of 2018.Visa Inc. (V)

(12/04/2018) Visa and Mastercard Inc. (MA) have agreed with European regulators to lower fees as-sessed to merchants when they accept debit or credit cards issued outside the European region, a move that comes after merchants alleged that networks and banks colluded to inflate those fees. The offer is an attempt to reduce or avoid possible fines from a long-running European Union (EU) antitrust probe. Card networks like Visa and Mastercard set interchange fees, which are applied to payments made in the EU and three other European countries with cards issued outside of the region.

(12/27/2018) Visa will pay $250.6 million to acquire the British company Earthport Plc (EPCUF), which facilitates international transactions for banks and businesses by maintaining a global payment network. According to Reuters, cross-border payments, or transactions that involve parties in two or more coun-tries, represent a growing business for Visa. Finaliza-tion of the deal requires shareholder approval from Earthport; the company is recommending approval of the all-cash offer. •

the repurchase of $500 mil-lion of its outstanding common stock, effective upon comple-tion of the current $300 million stock repurchase program. Stock repurchases of $124.8 million are remaining under the current $300 million stock repurchase program.Pfizer Inc. (PFE)

(12/14/2018) Pfizer declared a regular quarterly dividend of $0.36 per share, a 5.9% increase over the previous dividend of $0.34. The dividend is payable March 1, 2019, to shareholders of record on February 1, 2019. The stock will trade ex-dividend on Thursday, January 31, 2019.

(12/19/2018) Pfizer and GlaxoSmithKline plc (GSK) announced that they are combining their consumer health businesses in a new joint venture. The 2017 global sales for the combined business were approxi-mately $12.7 billion. Under the terms of the transac-tion, Pfizer will receive a 32% equity stake in the joint venture, entitling Pfizer to a share of the joint ven-ture’s earnings and dividends, which will be paid on a quarterly basis. The transaction is expected to deliver $650 million in peak cost synergies and to be slightly accretive for Pfizer in each of the first three years after the close of the transaction, which is anticipated dur-ing the second half of 2019—subject to receipt of GSK shareholder and regulatory approvals and satisfaction of other customary closing conditions.

(12/20/2018) Pfizer and partner Astellas Pharma (ALPMF) announced that a phase-three study evalu-ating prostate cancer drug, Xtandi, met its primary endpoint. The study evaluated the drug in combina-tion with androgen deprivation therapy (ADT) as a treatment for metastatic hormone-sensitive prostate cancer. Data showed that the Xtandi combination therapy significantly improved radiographic progres-sion-free survival, the primary endpoint, in the ex-panded patient population compared to ADT therapy alone. Xtandi is currently approved in the U.S. and Japan for the treatment of prostate cancer and in the European Union for the treatment of metastatic and high-risk non-metastatic prostate cancer.

(12/20/2018) Pfizer canceled a phase-two study evaluating the company’s investigational staph infec-tion vaccine, after an independent data-monitoring committee determined that there would be a low

Recent Earnings AnnouncementsDate Reported Expected Surprise

Stock (Ticker) Reported Earnings Earnings %Group 1Adobe Systems Inc. (ADBE) Dec 13 $1.83 $1.878 -2.6%Group 2Carnival Corp. (CCL) Dec 20 $0.70 $0.695 0.7%Group 3Apogee Enterprises Inc. (APOG) Dec 20 $0.80 $0.784 2.0%Toll Brothers Inc. (TOL) Dec 4 $2.08 $1.831 13.6%Group 4

Announcements through the close on 12/31/2018.No Group 4 companies reported earnings this month.

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6 January 2019


7 January 2019

Rel Price- AvgSSR Strength EPS Price- to- DailyPur- Latest Since Since Risk P/E (Est to- Book- Market Dollar

chase Price One Pur- Purchase Index Ratio EPS Current Hist Est Hist Sales Value Div Cap VolumeCompany (Exchange: Ticker) Date Price Price (12/31/18) Month chase (Index) 4 Wk 52 Wk (3 Yr) (TTM) (TTM) Year) EPS EPS Sales Ratio Ratio Yield (Mil) (Mil) DescriptionGroup 1: Profitability & Relative StrengthO'Reilly Automotive Inc. (ORLY) 1/4/19 na na $344.33 -0.7% na na 82% 92% 1.84 22.5 $15.31 $16.11 20.5% 16.9% 7.7% 2.95 55.7 0.0% $27,404 $218.8 automotive aftermarket parts, tool & suppliesAdobe Systems Inc. (ADBE) 8/31/18 $263.51 $259.84 $226.24 -9.8% -12.9% 1.02 53% 90% 1.80 39.9 $5.67 $7.77 15.3% 22.7% 10.6% 12.28 12.5 0.0% $108,917 $789.8 digital content software and servicesArista Networks Inc. (ANET) 1/26/18 $283.50 $274.98 $210.70 -11.6% -23.4% 0.87 46% 58% 3.15 54.4 $3.87 $7.76 73.0% 24.1% 53.5% 7.81 8.1 0.0% $15,520 $202.8 data center network equipmentBurlington Stores Inc. (BURL) 6/24/16 $63.53 $63.16 $162.67 -1.9% 157.6% 2.10 80% 91% 2.25 29.7 $5.48 $6.38 29.0% 22.6% 8.0% 1.64 56.1 0.0% $10,665 $162.3 discount retailer of branded apparelVisa Inc. (V) 1/29/16 $74.49 $73.53 $131.94 -6.9% 79.4% 1.36 64% 84% 1.22 33.5 $3.94 $5.32 15.7% 17.7% 11.8% 14.22 10.3 0.8% $288,619 $1,175.0 payment processing and credit card companyDomino's Pizza, Inc. (DPZ) 12/6/13 $69.78 $69.21 $247.99 -10.4% 258.3% 2.43 50% 90% 2.33 31.5 $7.88 $8.47 25.1% 20.7% 10.7% 3.18 nmf 0.9% $10,397 $140.6 pizza delivery companyGroup 2: Value & Financial StrengthHollyFrontier Corp. (HFC) 8/31/18 $74.52 $74.54 $51.12 -18.2% -31.4% 0.80 27% 72% 3.67 7.8 $6.55 $5.85 -19.8% 45.6% -6.6% 0.52 1.5 2.6% $8,853 $112.9 independent petroleum refinerWestern Digital Corp. (WDC) 8/3/18 $67.96 $67.98 $36.97 -17.4% -45.6% 0.63 26% 18% 3.24 5.7 $6.47 $7.02 12.3% -2.7% 6.1% 0.53 0.9 5.4% $10,634 $187.0 data storage devices and solutionsComcast Corporation (CMCSA) 3/29/18 $33.98 $33.82 $34.05 -12.2% 0.7% 1.07 42% 54% 1.79 13.9 $2.44 $2.55 12.6% 18.4% 6.2% 1.75 2.2 2.2% $156,276 $705.6 media and technology companyCarnival Corp. (CCL) 7/28/17 $66.40 $67.31 $49.30 -18.2% -26.8% 0.73 27% 41% 1.70 11.1 $4.45 $4.79 16.6% 11.8% 2.6% 1.84 1.4 4.1% $33,623 $190.6 cruise ship operator and vacation providerSkyworks Solutions Inc. (SWKS) 7/29/16 $66.02 $66.04 $67.02 -7.9% 1.5% 0.88 60% 36% 2.80 10.6 $6.34 $7.34 34.4% 10.9% 16.6% 3.09 2.9 2.3% $11,934 $135.0 produces analog semiconductorsCisco Systems, Inc. (CSCO) 1/29/16 $23.79 $23.24 $43.00 -9.5% 85.0% 1.40 54% 83% 1.71 17.7 $2.44 $3.04 3.0% 9.1% 0.3% 3.90 4.5 3.1% $192,292 $972.6 delivers integrated network and internet solutionsFirst American Financial Corp. (FAF) 8/28/15 $38.82 $38.14 $44.64 -6.8% 17.0% 0.93 61% 47% 1.83 10.3 $4.33 $4.43 -0.1% 12.5% 4.9% 0.87 1.4 3.8% $5,025 $31.1 property title insurance & related servicesPACCAR Inc. (PCAR) 5/29/15 $63.56 $63.43 $57.14 -4.9% -9.9% 0.74 59% 48% 1.90 9.9 $5.77 $6.13 6.4% 5.0% 2.7% 0.88 2.2 2.2% $19,949 $117.7 light, medium, and heavy-duty commercial trucksJPMorgan Chase & Co. (JPM) 2/27/15 $61.28 $61.84 $96.83 -12.2% 56.6% 1.28 44% 61% 1.69 11.2 $8.62 $9.27 5.6% 9.7% 2.8% 4.45 1.4 3.3% $322,000 $1,420.0 financial service and banking institutionWashington Federal Inc. (WAFD) 8/1/14 $20.69 $20.74 $26.71 -7.3% 28.8% 0.95 62% 45% 1.79 11.4 $2.33 $2.51 10.0% 7.0% 3.3% 3.66 1.1 2.7% $2,144 $10.8 bank holding companyUnitedHealth Group (UNH) 8/31/12 $54.30 $54.29 $249.12 -11.5% 358.9% 2.37 46% 82% 1.34 21.6 $11.53 $12.81 12.5% 15.8% 12.7% 1.09 4.8 1.4% $236,891 $763.3 diversified healthcare and well-being companyU.S. Bancorp (USB) 4/27/12 $32.29 $32.18 $45.70 -15.4% 42.0% 0.73 32% 55% 1.32 13.2 $3.47 $4.10 0.9% 6.8% 2.2% 4.77 1.7 3.2% $73,064 $329.0 multi-state financial services holding companyPfizer Inc. (PFE) 5/1/09 $13.58 $13.93 $43.65 -5.6% 213.4% 0.99 69% 87% 1.32 18.2 $2.40 $3.00 10.4% 7.5% -0.8% 4.80 3.6 3.3% $249,168 $946.5 global pharmaceutical companyGroup 3: GARP RevisionsAmerica's Car-Mart, Inc. (CRMT) 9/28/18 $78.20 $78.81 $72.45 -2.4% -8.1% 1.08 78% 94% 3.22 13.8 $5.26 $5.94 2.6% 19.5% 5.7% 0.77 2.0 0.0% $477 $5.4 used car retailerApogee Enterprises Inc. (APOG) 8/3/18 $49.11 $50.03 $29.85 -18.1% -40.3% 0.69 27% 33% 2.51 11.1 $2.68 $3.06 31.4% na 13.6% 0.60 1.6 2.1% $839 $7.4 architectural glass & metal glass framingsLam Research Corp. (LRCX) 10/27/17 $208.00 $207.61 $136.17 -12.6% -34.4% 0.68 40% 41% 2.48 8.0 $17.07 $14.47 90.5% 11.1% 25.2% 1.94 4.0 3.2% $21,015 $387.8 semiconductor processing systemsBank of America Corp. (BAC) 8/25/17 $23.77 $23.78 $24.64 -12.8% 3.6% 1.02 40% 52% 2.46 10.7 $2.30 $2.56 46.9% 20.7% 0.1% 3.86 1.0 2.4% $239,368 $1,550.2 bank holding companyj2 Global Inc. (JCOM) 1/6/17 $84.03 $83.81 $69.38 -6.0% -17.2% 0.76 68% 64% 1.89 23.8 $2.91 $6.30 3.9% 8.0% 24.7% 2.83 3.2 2.5% $3,389 $25.0 cloud computing services & digital mediaGentex Corporation (GNTX) 10/30/15 $16.39 $16.57 $20.21 -10.3% 22.0% 1.03 51% 68% 1.99 11.2 $1.81 $1.65 21.3% 15.0% 10.3% 2.92 2.9 2.2% $5,200 $43.0 automatic-dimming rearview mirrors & electronicsToll Brothers Inc. (TOL) 5/1/15 $35.81 $35.87 $32.93 -0.1% -8.2% 0.75 84% 35% 2.04 7.1 $4.67 $4.69 36.7% 1.1% 21.7% 0.68 1.0 1.3% $4,831 $101.3 designs, builds, markets luxury homesTetra Tech, Inc. (TTEK) 1/3/14 $27.63 $28.32 $51.77 -15.1% 82.8% 1.27 35% 79% 1.77 24.0 $2.16 $2.87 131.9% 15.0% 1.7% 1.30 3.0 0.9% $2,837 $13.9 natl resource, infrastructure, energy & envir svcsGroup 4: Reasonably Priced GrowthCelgene Corp. (CELG) 11/30/18 $72.22 $72.80 $64.09 -11.3% -12.0% 0.95 47% 28% 2.88 11.5 $5.57 $8.79 25.8% 19.8% 18.7% 3.06 9.3 0.0% $43,654 $357.7 pharmaceuticals treating cancer & inflammatory diseases Axcelis Technologies Inc. (ACLS) 8/31/18 $20.20 $20.21 $17.80 -10.6% -11.9% 1.03 49% 27% 3.09 5.0 $3.53 $1.30 36.8% 20.0% 15.1% 1.27 1.5 0.0% $576 $5.2 semiconductor chip implantation & processing equipmentJetBlue Airways Corp. (JBLU) 6/1/18 $18.77 $18.76 $16.06 -17.7% -14.4% 0.96 28% 38% 2.42 43.6 $0.37 $1.49 34.4% 5.1% 7.1% 0.67 1.1 0.0% $4,877 $76.8 passenger airline companyCopart, Inc. (CPRT) 1/27/17 $28.51 $27.92 $47.78 -6.6% 71.2% 1.57 65% 82% 2.11 25.1 $1.90 $2.12 20.5% na 11.5% 6.05 6.7 0.0% $11,120 $94.1 online auctions and vehicle remarketing servicesAbbVie Inc. (ABBV) 9/30/16 $63.07 $63.20 $92.19 -2.2% 45.9% 1.27 79% 66% 2.54 18.2 $5.08 $7.95 1.2% 16.8% 9.0% 4.33 nmf 4.6% $137,064 $554.6 biopharmaceutical companyD.R. Horton, Inc. (DHI) 12/4/15 $32.99 $32.22 $34.66 -6.9% 7.6% 0.89 64% 34% 2.18 8.5 $4.09 $4.32 26.4% 11.5% 20.8% 0.81 1.5 1.7% $13,015 $162.7 designs, builds & sells residential homesMagna International Inc. (MGA) 7/31/15 $54.36 $55.30 $45.45 -8.9% -17.8% 0.70 56% 48% 2.04 6.8 $6.69 $6.70 13.9% 4.7% 4.8% 0.38 1.4 2.9% $15,245 $61.4 supplier of automotive interior & exterior productsMetLife Inc. (MET) 9/28/12 $30.89 $30.88 $41.06 -8.0% 33.0% 0.71 59% 49% 2.02 8.5 $4.82 $5.34 31.8% 16.6% -1.9% 0.60 0.8 4.1% $40,085 $248.3 insurance, annuities & employee benefit programsReinsurance Grp of America (RGA) 6/24/11 $59.90 $60.75 $140.23 -6.1% 130.8% 1.10 67% 60% 1.44 12.6 $11.14 $12.22 7.1% na 4.9% 0.69 1.0 1.7% $8,642 $48.1 life & disability, annuity and financial reinsuranceData as of 12/31/2018. Source: AAII Stock Investor Pro, Thomson Reuters and I/B/E/S.

Gain/Loss

Portfolio AlertRel Strength Growth Rate

% Rank

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Rel Strength Since Purchase – Price performance of a stock compared to the iShares Dow Jones U.S. ETF (IYY) since the stock was purchased for the SSR portfolio.Rel Strength % Rank – An indication of how a stock has performed relative to all U.S.-listed stocks over the stated time period. A rank of 75% reflects performance that surpassed 75% of all stocks over the period—or that places the stock within the top 25% of the universe.Risk Index – The 36-month annualized standard deviation of return for the stock divided by the 36-month annualized standard deviation of return for the

iShares Dow Jones U.S. ETF (IYY). The baseline value for the index is 1.00. Values above 1.00 indicate greater risk than the index. Values below 1.00 indicate less risk than the index. P/E Ratio (TTM) – The current stock price divided by diluted earnings per share from continuing operations for the trailing 12 months.EPS (TTM) – The amount of fully diluted earnings from continuing operations reported by a company for the most recent 12-month period (TTM) on a per share basis.EPS (Est Current Year) – The average consensus earnings estimate for the current fiscal year.



Rel Price- AvgSSR Strength EPS Price- to- DailyPur- Latest Since Since Risk P/E (Est to- Book- Market Dollar

chase Price One Pur- Purchase Index Ratio EPS Current Hist Est Hist Sales Value Div Cap VolumeCompany (Exchange: Ticker) Date Price Price (12/31/18) Month chase (Index) 4 Wk 52 Wk (3 Yr) (TTM) (TTM) Year) EPS EPS Sales Ratio Ratio Yield (Mil) (Mil) DescriptionGroup 1: Profitability & Relative StrengthO'Reilly Automotive Inc. (ORLY) 1/4/19 na na $344.33 -0.7% na na 82% 92% 1.84 22.5 $15.31 $16.11 20.5% 16.9% 7.7% 2.95 55.7 0.0% $27,404 $218.8 automotive aftermarket parts, tool & suppliesAdobe Systems Inc. (ADBE) 8/31/18 $263.51 $259.84 $226.24 -9.8% -12.9% 1.02 53% 90% 1.80 39.9 $5.67 $7.77 15.3% 22.7% 10.6% 12.28 12.5 0.0% $108,917 $789.8 digital content software and servicesArista Networks Inc. (ANET) 1/26/18 $283.50 $274.98 $210.70 -11.6% -23.4% 0.87 46% 58% 3.15 54.4 $3.87 $7.76 73.0% 24.1% 53.5% 7.81 8.1 0.0% $15,520 $202.8 data center network equipmentBurlington Stores Inc. (BURL) 6/24/16 $63.53 $63.16 $162.67 -1.9% 157.6% 2.10 80% 91% 2.25 29.7 $5.48 $6.38 29.0% 22.6% 8.0% 1.64 56.1 0.0% $10,665 $162.3 discount retailer of branded apparelVisa Inc. (V) 1/29/16 $74.49 $73.53 $131.94 -6.9% 79.4% 1.36 64% 84% 1.22 33.5 $3.94 $5.32 15.7% 17.7% 11.8% 14.22 10.3 0.8% $288,619 $1,175.0 payment processing and credit card companyDomino's Pizza, Inc. (DPZ) 12/6/13 $69.78 $69.21 $247.99 -10.4% 258.3% 2.43 50% 90% 2.33 31.5 $7.88 $8.47 25.1% 20.7% 10.7% 3.18 nmf 0.9% $10,397 $140.6 pizza delivery companyGroup 2: Value & Financial StrengthHollyFrontier Corp. (HFC) 8/31/18 $74.52 $74.54 $51.12 -18.2% -31.4% 0.80 27% 72% 3.67 7.8 $6.55 $5.85 -19.8% 45.6% -6.6% 0.52 1.5 2.6% $8,853 $112.9 independent petroleum refinerWestern Digital Corp. (WDC) 8/3/18 $67.96 $67.98 $36.97 -17.4% -45.6% 0.63 26% 18% 3.24 5.7 $6.47 $7.02 12.3% -2.7% 6.1% 0.53 0.9 5.4% $10,634 $187.0 data storage devices and solutionsComcast Corporation (CMCSA) 3/29/18 $33.98 $33.82 $34.05 -12.2% 0.7% 1.07 42% 54% 1.79 13.9 $2.44 $2.55 12.6% 18.4% 6.2% 1.75 2.2 2.2% $156,276 $705.6 media and technology companyCarnival Corp. (CCL) 7/28/17 $66.40 $67.31 $49.30 -18.2% -26.8% 0.73 27% 41% 1.70 11.1 $4.45 $4.79 16.6% 11.8% 2.6% 1.84 1.4 4.1% $33,623 $190.6 cruise ship operator and vacation providerSkyworks Solutions Inc. (SWKS) 7/29/16 $66.02 $66.04 $67.02 -7.9% 1.5% 0.88 60% 36% 2.80 10.6 $6.34 $7.34 34.4% 10.9% 16.6% 3.09 2.9 2.3% $11,934 $135.0 produces analog semiconductorsCisco Systems, Inc. (CSCO) 1/29/16 $23.79 $23.24 $43.00 -9.5% 85.0% 1.40 54% 83% 1.71 17.7 $2.44 $3.04 3.0% 9.1% 0.3% 3.90 4.5 3.1% $192,292 $972.6 delivers integrated network and internet solutionsFirst American Financial Corp. (FAF) 8/28/15 $38.82 $38.14 $44.64 -6.8% 17.0% 0.93 61% 47% 1.83 10.3 $4.33 $4.43 -0.1% 12.5% 4.9% 0.87 1.4 3.8% $5,025 $31.1 property title insurance & related servicesPACCAR Inc. (PCAR) 5/29/15 $63.56 $63.43 $57.14 -4.9% -9.9% 0.74 59% 48% 1.90 9.9 $5.77 $6.13 6.4% 5.0% 2.7% 0.88 2.2 2.2% $19,949 $117.7 light, medium, and heavy-duty commercial trucksJPMorgan Chase & Co. (JPM) 2/27/15 $61.28 $61.84 $96.83 -12.2% 56.6% 1.28 44% 61% 1.69 11.2 $8.62 $9.27 5.6% 9.7% 2.8% 4.45 1.4 3.3% $322,000 $1,420.0 financial service and banking institutionWashington Federal Inc. (WAFD) 8/1/14 $20.69 $20.74 $26.71 -7.3% 28.8% 0.95 62% 45% 1.79 11.4 $2.33 $2.51 10.0% 7.0% 3.3% 3.66 1.1 2.7% $2,144 $10.8 bank holding companyUnitedHealth Group (UNH) 8/31/12 $54.30 $54.29 $249.12 -11.5% 358.9% 2.37 46% 82% 1.34 21.6 $11.53 $12.81 12.5% 15.8% 12.7% 1.09 4.8 1.4% $236,891 $763.3 diversified healthcare and well-being companyU.S. Bancorp (USB) 4/27/12 $32.29 $32.18 $45.70 -15.4% 42.0% 0.73 32% 55% 1.32 13.2 $3.47 $4.10 0.9% 6.8% 2.2% 4.77 1.7 3.2% $73,064 $329.0 multi-state financial services holding companyPfizer Inc. (PFE) 5/1/09 $13.58 $13.93 $43.65 -5.6% 213.4% 0.99 69% 87% 1.32 18.2 $2.40 $3.00 10.4% 7.5% -0.8% 4.80 3.6 3.3% $249,168 $946.5 global pharmaceutical companyGroup 3: GARP RevisionsAmerica's Car-Mart, Inc. (CRMT) 9/28/18 $78.20 $78.81 $72.45 -2.4% -8.1% 1.08 78% 94% 3.22 13.8 $5.26 $5.94 2.6% 19.5% 5.7% 0.77 2.0 0.0% $477 $5.4 used car retailerApogee Enterprises Inc. (APOG) 8/3/18 $49.11 $50.03 $29.85 -18.1% -40.3% 0.69 27% 33% 2.51 11.1 $2.68 $3.06 31.4% na 13.6% 0.60 1.6 2.1% $839 $7.4 architectural glass & metal glass framingsLam Research Corp. (LRCX) 10/27/17 $208.00 $207.61 $136.17 -12.6% -34.4% 0.68 40% 41% 2.48 8.0 $17.07 $14.47 90.5% 11.1% 25.2% 1.94 4.0 3.2% $21,015 $387.8 semiconductor processing systemsBank of America Corp. (BAC) 8/25/17 $23.77 $23.78 $24.64 -12.8% 3.6% 1.02 40% 52% 2.46 10.7 $2.30 $2.56 46.9% 20.7% 0.1% 3.86 1.0 2.4% $239,368 $1,550.2 bank holding companyj2 Global Inc. (JCOM) 1/6/17 $84.03 $83.81 $69.38 -6.0% -17.2% 0.76 68% 64% 1.89 23.8 $2.91 $6.30 3.9% 8.0% 24.7% 2.83 3.2 2.5% $3,389 $25.0 cloud computing services & digital mediaGentex Corporation (GNTX) 10/30/15 $16.39 $16.57 $20.21 -10.3% 22.0% 1.03 51% 68% 1.99 11.2 $1.81 $1.65 21.3% 15.0% 10.3% 2.92 2.9 2.2% $5,200 $43.0 automatic-dimming rearview mirrors & electronicsToll Brothers Inc. (TOL) 5/1/15 $35.81 $35.87 $32.93 -0.1% -8.2% 0.75 84% 35% 2.04 7.1 $4.67 $4.69 36.7% 1.1% 21.7% 0.68 1.0 1.3% $4,831 $101.3 designs, builds, markets luxury homesTetra Tech, Inc. (TTEK) 1/3/14 $27.63 $28.32 $51.77 -15.1% 82.8% 1.27 35% 79% 1.77 24.0 $2.16 $2.87 131.9% 15.0% 1.7% 1.30 3.0 0.9% $2,837 $13.9 natl resource, infrastructure, energy & envir svcsGroup 4: Reasonably Priced GrowthCelgene Corp. (CELG) 11/30/18 $72.22 $72.80 $64.09 -11.3% -12.0% 0.95 47% 28% 2.88 11.5 $5.57 $8.79 25.8% 19.8% 18.7% 3.06 9.3 0.0% $43,654 $357.7 pharmaceuticals treating cancer & inflammatory diseases Axcelis Technologies Inc. (ACLS) 8/31/18 $20.20 $20.21 $17.80 -10.6% -11.9% 1.03 49% 27% 3.09 5.0 $3.53 $1.30 36.8% 20.0% 15.1% 1.27 1.5 0.0% $576 $5.2 semiconductor chip implantation & processing equipmentJetBlue Airways Corp. (JBLU) 6/1/18 $18.77 $18.76 $16.06 -17.7% -14.4% 0.96 28% 38% 2.42 43.6 $0.37 $1.49 34.4% 5.1% 7.1% 0.67 1.1 0.0% $4,877 $76.8 passenger airline companyCopart, Inc. (CPRT) 1/27/17 $28.51 $27.92 $47.78 -6.6% 71.2% 1.57 65% 82% 2.11 25.1 $1.90 $2.12 20.5% na 11.5% 6.05 6.7 0.0% $11,120 $94.1 online auctions and vehicle remarketing servicesAbbVie Inc. (ABBV) 9/30/16 $63.07 $63.20 $92.19 -2.2% 45.9% 1.27 79% 66% 2.54 18.2 $5.08 $7.95 1.2% 16.8% 9.0% 4.33 nmf 4.6% $137,064 $554.6 biopharmaceutical companyD.R. Horton, Inc. (DHI) 12/4/15 $32.99 $32.22 $34.66 -6.9% 7.6% 0.89 64% 34% 2.18 8.5 $4.09 $4.32 26.4% 11.5% 20.8% 0.81 1.5 1.7% $13,015 $162.7 designs, builds & sells residential homesMagna International Inc. (MGA) 7/31/15 $54.36 $55.30 $45.45 -8.9% -17.8% 0.70 56% 48% 2.04 6.8 $6.69 $6.70 13.9% 4.7% 4.8% 0.38 1.4 2.9% $15,245 $61.4 supplier of automotive interior & exterior productsMetLife Inc. (MET) 9/28/12 $30.89 $30.88 $41.06 -8.0% 33.0% 0.71 59% 49% 2.02 8.5 $4.82 $5.34 31.8% 16.6% -1.9% 0.60 0.8 4.1% $40,085 $248.3 insurance, annuities & employee benefit programsReinsurance Grp of America (RGA) 6/24/11 $59.90 $60.75 $140.23 -6.1% 130.8% 1.10 67% 60% 1.44 12.6 $11.14 $12.22 7.1% na 4.9% 0.69 1.0 1.7% $8,642 $48.1 life & disability, annuity and financial reinsuranceData as of 12/31/2018. Source: AAII Stock Investor Pro, Thomson Reuters and I/B/E/S.

Gain/Loss

Portfolio AlertRel Strength Growth Rate

% Rank

To view this PDF as 2 page spreads in Acrobat: Go to the View menu > Page Display > Two Page View. In the same Page Display menu, make sure Show Cover in Two Page View is checked.

Growth Rate—Hist EPS – The compound annual percentage change in fully diluted earnings per share from continuing operations over the last five fiscal years.Growth Rate—Est EPS – The average of analysts’ expected long-term (three- to five-year) growth rate in earnings per share.Growth Rate—Hist Sales – The compound annual percentage change in total sales over the last five fiscal years.Price-to-Sales Ratio – The current stock price divided by the sales per share for the trailing 12 months (last four fiscal quarters).

Price-to-Book-Value Ratio – The current stock price divided by book value per share for the latest reported fiscal quarter. Book value per share is equal to total assets less total liabilities and preferred stock, divided by common shares outstanding.Div Yield – The indicated dividend (last quarterly per share dividend multiplied by four) divided by the current stock price. Market Cap (Mil) – The current stock price multiplied by the average number of common shares outstanding during the last fiscal quarter.Avg Daily Dollar Volume (Mil) – The current stock price multiplied by the average daily trading volume over the last six months.

8 January 2019


9 January 2019

SSR Group 1: O'Reilly Automotive Inc. (ORLY) $344.33 ($363.20 - $217.64)

Group 1: Profitability & Relative StrengthAddition Alert Date: 1/4/2019

Price at Alert: Closing price on 1/4/2019

Primary Industry: Retailers-Auto Vhcls, Pts & Ser

3 Yr Risk Index: 1.81

Market Cap: $27,404 Mil

Avg Daily Dollar Volume: $218.8 Mil

Multiples Current 12/2017 12/2016 12/2015 12/2014 12/2013Price/Earnings 22.5 18.8 24.1 24.9 22.1 18.5Price/Book Value 55.7 30.7 15.2 11.7 8.4 6.2Price/Sales 2.9 2.2 2.9 2.9 2.4 1.8Price/Cash Flow nmf nmf 826.8 nmf 895.5 nmfPrice/Free Cash Flow 24.1 21.6 24.2 24.9 22.7 24.2Yield (%) 0.0 0.0 0.0 0.0 0.0 0.0Ratios Current 12/2017 12/2016 12/2015 12/2014 12/2013Gross Margin (%) 52.7 52.6 52.5 52.3 51.4 50.7Operating Margin (%) 19.0 19.2 19.8 19.0 17.6 16.6Net Margin (%) 14.1 12.6 12.1 11.7 10.8 10.1ROE (%) 270.7 99.5 57.8 46.8 39.1 32.9ROA (%) 17.2 15.3 15.0 14.1 12.4 11.3Current Ratio 0.9 0.9 1.0 1.0 1.1 1.2Payout Ratio (%) 0.0 0.0 0.0 0.0 0.0 0.0Liabilities to Assets (%) 93.7 91.4 77.4 70.6 69.1 67.6Asset Turnover 1.2 1.2 1.2 1.2 1.1 1.1Financial Statements TTM 12/2017 12/2016 12/2015 12/2014 12/2013

Sales ($M) 9,412.3 8,977.7 8,593.1 7,966.7 7,216.1 6,649.2Stock Rel Strgth Rel Strgth Gross Income ($M) 4,964.8 4,720.7 4,509.0 4,162.6 3,708.9 3,369.0Gain Index Rank Depreciation ($M) 0.0 0.0 0.0 0.0 0.0 0.0

4 Week (1%) 1.10 82% Unusual/Extra ($M) 0.0 0.0 0.0 0.0 0.0 0.013 Week (1%) 1.15 84% Operating Income ($M) 1,790.0 1,725.4 1,699.2 1,514.0 1,270.4 1,103.526 Week 26% 1.37 94% Interest Expense ($M) 117.5 91.3 70.9 57.1 53.3 49.152 Week 42% 1.52 92% Pretax Income ($M) 1,677.7 1,637.8 1,637.2 1,460.4 1,222.2 1,058.9

Net Income ($M) 1,326.4 1,133.8 1,037.7 931.2 778.2 670.3Growth TTM 3 Year 5 Year Operating Cash Flow ($M) 1,658.3 1,403.7 1,510.7 1,345.5 1,190.4 908.0

Sales 5.9% 7.6% 7.7% Investing Cash Flow ($M) (464.1) (464.2) (529.1) (407.2) (423.4) (388.8)Net Income 23.1% 13.4% 14.1% Financing Cash Flow ($M) (1,191.4) (1,039.7) (951.3) (1,072.6) (747.8) (536.1)EPS Basic 35.0% 19.8% 21.5% Net Cash Flow ($M) 2.7 (100.3) 30.3 (134.3) 19.2 (16.8)EPS Dil Cont 30.3% 18.1% 20.5% EPS Basic ($) 16.08 12.82 10.87 9.32 7.46 6.14Dividends -- -- -- EPS Diluted Cont ($) 15.31 12.08 10.73 9.17 7.34 6.03

Dividends/Share ($) 0.00 0.00 0.00 0.00 0.00 0.00Est Surprise EPS % Surp SUE Score Free Cash Flow/Share ($) 14.30 10.48 10.69 9.18 7.17 4.6110/24/2018 $4.50 4.5% 5.00 Cash ($M) 40.0 46.3 146.6 116.3 250.6 231.3

Quarterly Annual Annual Goodwill/Intangibles ($M) 789.2 798.5 796.7 769.5 771.3 774.9EPS Estimates 12/2018 12/2018 12/2019 Total Assets ($M) 7,894.7 7,571.9 7,204.2 6,676.7 6,532.1 6,067.2# of Estimates 21 22 22 Long-Term Debt ($M) 3,174.3 2,978.4 1,887.0 1,390.0 1,388.4 1,396.1Current $3.75 $16.11 $17.81 Total Liabilities ($M) 7,396.3 6,918.8 5,577.1 4,715.4 4,513.7 4,100.9Month Ago $3.75 $16.11 $17.81 Book Value/Share ($) 6.18 7.38 17.05 19.62 19.36 18.00Three Mos. Ago $3.74 $15.91 $17.64 Avg Shares Outst'g (M) 80.6 88.4 95.4 100.0 104.3 109.2Sources: AAII Stock Investor Pro, Thomson Reuters and I/B/E/S. Data as of 12/31/2018.

O'Reilly Automotive is a specialty retailer of automotive

aftermarket parts, tools, supplies, equipment and

accessories in the U.S. It sells its products to both do-it-

yourself and professional service provider customers.

The company's product line includes new and

remanufactured automotive hard parts, maintenance

items, and appearance products and accessories.

O'Reilly's stores offer various services and programs to

its customers, such as used oil, oil filter and battery

recycling; battery diagnostic testing; electrical and

module testing; check engine light code extraction;

loaner tool program; custom hydraulic hoses; and

machine shops.

O'Reilly passed the Group 1 screen, which looks for

companies with a proven record of earnings growth that

are showing strong relative price strength. ORLY has a

current P/E of 22.5 based on trailing 12-month EPS of

$15.31. The consensus EPS estimate for fiscal-year

2019, ending 12/2019, is $17.81 and $19.71 the year

after. On 10/24/2018, O'Reilly reported quarterly EPS of

$4.50, 4.5% above analyst expectations. The consensus

long-term estimated earnings growth rate is 16.9% from

four analysts. Earnings have grown at an annual rate of

20.5% over the last five years. Over the last 52 weeks,

ORLY's stock price has outperformed the S&P 500 by

52% and has outperformed 92% of all U.S. stocks.

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SSR Group 2: UnitedHealth Group (UNH) $249.12 ($287.94 - $208.48)

Group 2: Value & Financial StrengthAddition Alert Date: 08/31/2012

Price at Alert: $54.30

Primary Industry: Managed Health Care




Multiples Current 12/2017 12/2016 12/2015 12/2014 12/2013Price/Earnings 21.6 20.4 18.7 18.4 15.2 11.6Price/Book Value 4.8 3.9 3.4 3.1 2.6 2.0Price/Sales 1.1 0.9 0.7 0.7 0.7 0.5Price/Cash Flow 0.6 0.5 0.5 0.5 0.4 0.3Price/Free Cash Flow 45.1 21.7 22.5 16.7 16.6 14.1Yield (%) 1.4 1.5 1.7 1.7 1.6 1.7Ratios Current 12/2017 12/2016 12/2015 12/2014 12/2013Gross Margin (%) -- 35.4 36.7 33.9 28.5 27.1Operating Margin (%) 7.7 7.6 7.0 7.0 7.9 7.9Net Margin (%) 5.7 5.2 3.8 3.7 4.3 4.6ROE (%) 26.0 24.5 19.5 17.5 17.4 17.8ROA (%) 8.4 8.1 6.0 5.9 6.7 6.9Current Ratio -- -- -- -- -- --Payout Ratio (%) 25.3 26.3 32.2 30.7 24.7 18.8Liabilities to Assets (%) 66.9 65.6 68.8 69.6 62.4 60.7Asset Turnover -- -- -- -- -- --Financial Statements TTM 12/2017 12/2016 12/2015 12/2014 12/2013

Sales ($M) 219,891.0 201,159.0 184,840.0 157,107.0 130,474.0 122,489.0Stock Rel Strgth Rel Strgth Gross Income ($M) -- 71,123.0 67,802.0 53,232.0 37,217.0 33,199.0Gain Index Rank Depreciation ($M) 2,369.0 2,245.0 2,055.0 1,693.0 1,478.0 1,375.0

4 Week (11%) 0.98 46% Unusual/Extra ($M) 1,399.0 1,375.0 1,309.0 1,124.0 1,064.0 991.013 Week (6%) 1.09 76% Operating Income ($M) 16,824.0 15,209.0 12,930.0 11,021.0 10,274.0 9,623.026 Week 2% 1.10 82% Interest Expense ($M) 1,334.0 1,186.0 1,067.0 790.0 618.0 708.052 Week 12% 1.20 82% Pretax Income ($M) 15,490.0 14,023.0 11,863.0 10,231.0 9,656.0 8,915.0

Net Income ($M) 12,563.0 10,558.0 7,017.0 5,813.0 5,619.0 5,625.0Growth TTM 3 Year 5 Year Operating Cash Flow ($M) 10,740.0 13,596.0 9,795.0 9,740.0 8,051.0 6,991.0

Sales 11.8% 15.5% 12.7% Investing Cash Flow ($M) (13,949.0) (8,599.0) (9,355.0) (18,395.0) (2,534.0) (3,089.0)Net Income 45.7% 23.4% 13.8% Financing Cash Flow ($M) (2,677.0) (3,441.0) (1,011.0) 12,239.0 (5,293.0) (4,946.0)EPS Basic 44.9% 24.3% 15.3% Net Cash Flow ($M) (6,006.0) 1,551.0 (493.0) 3,428.0 219.0 (1,130.0)EPS Dil Cont 31.1% 18.6% 12.5% EPS Basic ($) 13.02 10.95 7.37 6.10 5.70 5.59Dividends 20.0% 27.0% 29.2% EPS Diluted Cont ($) 11.53 9.50 7.25 6.01 5.70 5.50

Dividends/Share ($) 3.30 2.88 2.38 1.88 1.41 1.05Est Surprise EPS % Surp SUE Score Free Cash Flow/Share ($) 5.52 8.93 6.02 6.62 5.24 4.5210/16/2018 $3.41 3.6% 2.90 Cash ($M) 10,263.0 11,981.0 10,430.0 10,923.0 7,495.0 7,276.0

Quarterly Annual Annual Goodwill/Intangibles ($M) 68,201.0 63,045.0 56,125.0 61,235.0 36,609.0 35,448.0EPS Estimates 12/2018 12/2018 12/2019 Total Assets ($M) 151,087.0 139,058.0 122,810.0 111,254.0 86,382.0 81,882.0# of Estimates 22 25 25 Long-Term Debt ($M) 32,053.0 28,835.0 25,777.0 25,331.0 16,007.0 14,891.0Current $3.21 $12.81 $14.62 Total Liabilities ($M) 101,077.0 91,282.0 84,536.0 77,424.0 53,928.0 49,733.0Month Ago $3.21 $12.81 $14.62 Book Value/Share ($) 51.99 49.56 40.20 35.50 32.91 31.96Three Mos. Ago $3.21 $12.80 $14.55 Avg Shares Outst'g (M) 962.0 964.0 952.0 953.0 986.0 1,006.0Sources: AAII Stock Investor Pro, Thomson Reuters and I/B/E/S. Data as of 12/31/2018.

UnitedHealth is a health and well-being company

operating through four segments: UnitedHealthcare,

OptumHealth, OptumInsight and OptumRx. It conducts

its operations through two business platforms: health

benefits operating under UnitedHealthcare and health

services operating under Optum. UnitedHealthcare

provides health care benefits to an array of customers

and markets. Optum is a health services business serving

the health care marketplace. OptumInsight provides

services, technology and health care solutions to

participants in the health care industry. OptumRx

provides retail network contracting, purchasing and

clinical solutions.

UNH passed the Group 2 screen, which looks for

dividend-paying stocks with a low price-earnings ratio

exhibiting positive historical and projected earnings

growth and moderate levels of liabilities. UNH has a

current P/E ratio of 21.6 based on trailing 12-month EPS

of $11.53. The consensus EPS estimate for fiscal-year

2019 is $14.62 and for fiscal-year 2020 is $16.58. The

latest quarterly EPS came in at $3.41, which was 3.6%

above analyst expectations. The consensus long-term

estimated earnings growth rate is 15.8%. Earnings have

increased on an annualized basis by 12.5% over the last

five years. Revenues have grown by 12.7% a year over

the same period. UNH's current yield is 1.4% based on

an indicated dividend of $3.60 per share. Over the last 12

months, UNH has outperformed 82% of all stocks.

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10 January 2019


11 January 2019

SSR Group 3: Toll Brothers Inc. (TOL) $32.93 ($52.73 - $28.68)

Group 3: GARP RevisionsAddition Alert Date: 5/1/2015


Primary Industry: Homebuilding




Multiples Current 10/2018 10/2017 10/2016 10/2015 10/2014Price/Earnings 7.1 8.8 9.0 17.1 17.4 18.7Price/Book Value 1.0 1.3 1.0 1.5 1.4 1.6Price/Sales 0.7 0.9 0.8 1.2 1.5 1.6Price/Cash Flow 10.2 13.4 61.3 -- 19.1 --Price/Free Cash Flow 9.3 12.3 5.4 53.4 125.4 21.5Yield (%) 1.3 1.0 0.8 0.0 0.0 0.0Ratios Current 10/2018 10/2017 10/2016 10/2015 10/2014Gross Margin (%) 20.6 20.6 21.5 19.8 21.6 21.2Operating Margin (%) 11.0 11.0 11.1 9.5 10.7 10.2Net Margin (%) 10.5 10.5 9.2 7.4 8.7 8.7ROE (%) 16.4 16.1 12.2 9.0 9.0 9.5ROA (%) 7.5 7.6 5.6 4.0 4.1 4.5Current Ratio (%) -- -- -- -- -- --Payout Ratio (%) 8.3 8.3 7.3 0.0 0.0 0.0Liabilities to Assets (%) 53.5 53.5 52.0 56.6 54.1 54.1Asset Turnover 0.7 0.7 0.6 0.5 0.5 0.5Financial Statements TTM 10/2018 10/2017 10/2016 10/2015 10/2014Sales ($M) 7,143.3 7,143.3 5,815.1 5,169.5 4,171.2 3,911.6Gross Income ($M) 1,470.3 1,470.3 1,252.8 1,025.4 902.0 829.8

Gain Index Rank Depreciation ($M) 0.0 0.0 0.0 0.0 0.0 0.04 Week (0%) 1.10 84% Unusual/Extra ($M) 0.0 0.0 0.0 0.0 0.0 0.013 Week (0%) 1.16 85% Operating Income ($M) 786.3 786.2 647.2 492.3 446.9 397.226 Week (11%) 0.97 64% Interest Expense ($M) 0.0 0.0 0.0 0.0 0.0 0.752 Week (32%) 0.73 35% Pretax Income ($M) 933.9 933.9 814.3 589.0 535.6 504.6

Net Income ($M) 748.2 748.2 535.5 382.1 363.2 340.0Growth TTM 3 Year 5 Year Operating Cash Flow ($M) 55.3 602.4 965.0 150.9 60.2 313.2

Sales 22.8% 19.6% 21.7% Investing Cash Flow ($M) (20.5) 81.3 (7.7) 8.2 (52.8) (1,452.1)Net Income 39.7% 27.2% 34.4% Financing Cash Flow ($M) 7.4 (214.3) (878.2) (444.4) 325.3 952.2EPS Basic 49.8% 33.7% 37.3% Net Cash Flow ($M) 42.2 469.4 79.1 (285.3) 332.7 (186.7)EPS Dil Cont 46.8% 32.8% 36.7% EPS Basic ($) 4.96 4.92 3.30 2.27 2.06 1.92Dividends 70.8% 0.0% 0.0% EPS Diluted Cont ($) 4.67 4.62 3.17 2.18 1.98 1.84

Dividends/Share ($) 0.41 0.41 0.24 0.00 0.00 0.00Est Surprise EPS % Surp SUE Score Free Cash Flow/Share ($) 3.53 3.32 5.30 0.70 0.27 1.6012/4/2018 $2.08 13.6% 4.00 Cash ($M) 1,182.2 1,182.2 712.8 633.7 919.0 586.3


Toll Brothers Inc. is engaged in designing, building,

marketing, selling and arranging financing for detached

and attached homes in luxury residential communities. Its

traditional home building segment operates in five

geographic segments in the U.S.: the North, the Mid-

Atlantic, the South, the West and California. City living

is the company's urban development division. Its

traditional home building product includes detached

homes and move-up, executive, estate, active-adult and

age-qualified lines of home.

TOL passed the Group 3 screen, which seeks companies

with upward earnings estimate revisions, a positive

earnings surprise in the most recent quarter, and relatively

strong price action. TOL's current P/E ratio is 7.1 based

on EPS of $4.67. The latest quarterly EPS was $2.08,

exceeding analyst expectations by 13.6%. The consensus

EPS estimate for the current fiscal year ending October

2019 is $4.69. The historical five-year annual growth rate

for earnings is 36.7% and for revenues is 21.7%. The

consensus long-term estimated annual earnings growth

rate is 1.1% from one analyst. Over the past 52 weeks,

TOL's 32% price decline has outperformed 35% of all

U.S. stocks.

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SSR Group 4: Reinsurance Group of America (RGA) $140.23 ($164.86 - $127.84)

Group 4: Reasonably Priced GrowthAddition Alert Date: 6/24/2011


Primary Industry: Reinsurance




Multiples Current 12/2017 12/2016 12/2015 12/2014 12/2013Price/Earnings 12.6 12.0 9.6 12.1 8.2 11.4Price/Book Value 1.0 1.0 0.9 1.0 0.8 0.8Price/Sales 0.7 0.7 0.6 0.6 0.5 0.5Price/Cash Flow 17.3 91.8 nmf nmf 7.8 nmfPrice/Free Cash Flow 5.1 5.2 5.1 3.1 2.6 naYield (%) 1.7 1.3 1.5 1.6 1.6 1.6Ratios Current 12/2017 12/2016 12/2015 12/2014 12/2013Gross Margin (%) 89.2 20.5 19.5 17.7 19.4 16.7Operating Margin (%) 8.8 10.5 10.4 8.7 10.2 7.5Net Margin (%) 14.2 14.5 6.1 4.8 6.3 4.1ROE (%) 20.4 21.9 10.6 7.6 10.6 6.5ROA (%) 3.0 3.2 1.4 1.1 1.6 1.0Current Ratio (%) -- -- -- -- -- --Payout Ratio (%) 7.4 6.4 14.3 18.6 12.8 18.5Liabilities to Assets (%) 86.4 84.2 86.6 87.8 84.3 85.0Asset Turnover -- -- -- -- -- --Financial Statements TTM 12/2017 12/2016 12/2015 12/2014 12/2013

Sales ($M) 12,865.3 12,558.4 11,560.2 10,475.6 10,912.0 10,331.3Stock Rel Strgth Rel Strgth Gross Income ($M) 11,475.5 2,572.8 2,256.3 1,858.7 2,113.9 1,726.1Gain Index Rank Depreciation ($M) 0.0 0.0 0.0 0.0 0.0 0.0

4 Week (6%) 1.04 67% Unusual/Extra ($M) 35.7 42.6 38.7 57.4 7.8 12.913 Week (3%) 1.13 81% Operating Income ($M) 1,138.5 1,317.5 1,207.4 910.3 1,116.7 770.026 Week 5% 1.14 86% Interest Expense ($M) 175.1 174.7 163.5 165.5 108.1 134.852 Week (10%) 0.96 60% Pretax Income ($M) 963.4 1,142.8 1,043.9 744.8 1,008.5 635.3

Net Income ($M) 1,822.7 1,822.2 701.4 502.2 684.0 418.8Growth TTM 3 Year 5 Year Operating Cash Flow ($M) 1,978.0 1,982.3 1,465.7 2,088.6 2,336.2 1,727.2

Sales 3.9% 4.8% 4.9% Investing Cash Flow ($M) (520.2) (1,607.6) (2,825.7) (1,431.7) (1,310.9) (1,335.1)Net Income 129.1% 38.6% 23.6% Financing Cash Flow ($M) (908.8) (324.6) 1,055.4 (708.3) (255.6) (681.2)EPS Basic 129.9% 42.0% 27.0% Net Cash Flow ($M) 525.9 102.8 (324.6) (120.4) 722.0 (336.2)EPS Dil Cont (8.2%) 7.0% 7.1% EPS Basic ($) 28.39 28.28 10.91 7.55 9.88 5.82Dividends 21.4% 13.0% 16.7% EPS Diluted Cont ($) 11.14 11.99 10.79 7.46 9.78 5.78

Dividends/Share ($) 2.10 1.82 1.56 1.40 1.26 1.08Est Surprise EPS % Surp SUE Score Free Cash Flow/Share ($) 27.67 27.69 20.32 29.30 30.88 --10/25/2018 $4.03 22.6% 7.30 Cash ($M) 1,730.5 1,303.5 1,200.7 1,525.3 1,645.7 923.6


Reinsurance Group of America is an insurance holding

company providing traditional life and health

reinsurance and financial solutions with operations in

the U.S., Latin America, Canada, Europe, Africa, Asia

and Australia. It has geographic-based and business-

based operational segments, including U.S. and Latin

America; Canada; Europe, Middle East and Africa; Asia

Pacific; and corporate and other. Traditional reinsurance

includes individual and group life and health, disability,

and critical illness reinsurance.

RGA was selected using the Group 4 approach, which

looks for a combination of low P/E ratios, solid EPS

growth forecasts, a strong record of sales growth, and

strong relative profitability. It has a current P/E ratio of

12.6, based on a trailing 12-month EPS of $11.14. The

consensus EPS estimate for fiscal-year 2019 is $13.48

and for fiscal-year 2020 is $14.54. Earnings have

increased by 7.1% annually over the last five years,

while revenues have grown 4.9% annually over the same

period. RGA currently pays an indicated annual

dividend of $2.40 per share, which translates into a

dividend yield of 1.7%. RGA has underperformed the

S&P 500 by 4% over the past 52 weeks and has

outperformed 60% of all U.S. stocks over the same

period.

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12 January 2019


Portfolio Corner: 2018’s Best and Weakest Stocks

The SSR portfolio fell 10.8% for the year after gain-ing 18.0% in 2017. In comparison, the iShares Dow Jones U.S. ETF (IYY) posted a loss of 5.7% during 2018. Forty-eight stocks were held in the SSR portfo-lio throughout the year, and 12 had positive returns while part of the tracking portfolio.

The Stock Superstars Report just completed its 17th year and has achieved an annualized total return of 7.4%, compared to annual total return of 6.9% for the portfolio benchmark iShares Dow Jones U.S. ETF (IYY).

Performance by GroupMomentum and growth approaches generally did

better than income (dividend) and value approaches during 2018, carrying over the trend from 2017. The stocks in Group 1 had the strongest performance as a group during 2018, rising 5.5% on a total return basis. Group 1 was the only SSR group to post a gain for the year. Group 1’s profitability and relative strength approach seeks out companies with a proven record of growth that show strong relative price strength along with consistent quarterly earnings momentum and consistent and strong long-term earnings growth.

At the end of 2018, Group 1 held six stocks. Among these six stocks, two were the strongest performers in the overall SSR portfolio for 2018. Domino’s Pizza

Inc. (DPZ) posted the largest gain in the SSR portfolio for 2018, climbing 55.0%, and Burlington Stores Inc. (BURL) was the second-strongest performer with a 32.2% return.

After posting the best group performance in 2017, the stocks in Group 4 had the weakest performance during 2018. Group 4 follows a reasonably priced growth approach that looks for strong but sustainable historical sales growth, expectations of strong future earnings growth and a low dividend-adjusted PEG ratio (the ratio of trailing price-earnings ratio and the sum of the expected average annual earnings growth rate and the dividend yield).

Group 1 continues to have the highest level of vola-tility of the four groups with a risk index of 1.61, indi-cating that it was 61% more volatile than the market over the last three years. The risk index compares the three-year volatility of a security to that of the bench-mark. Portfolio volatility can be reduced by holding a diverse cross-section of stocks and strategies, as witnessed by the SSR portfolio’s risk index of 1.11. This, in turn, indicates that the SSR tracking portfolio is only 11% more volatile than the overall market.

The Best-Performing StockDomino’s Pizza (Group 1: DPZ) realized a 55.0% re-

turn in 2018 after gaining 19.9% in 2017. In November, Domino’s ranked number one on Pizza Today’s Top 100 companies list based on global retail sales.

The Worst-Performing StockWestern Digital (Group 2: WDC) fell by

45.1% in 2018. Western Digital is a devel-oper, manufacturer and provider of data storage devices and solutions. Declining PC shipments have cut into the demand for the company’s products and weakened pric-ing, leading the company to cut guidance throughout 2018.

The return data in the table reflects the total return (price change plus dividend) less any transactions costs while the stock was held in the SSR tracking portfolio.

For a complete list of the performance of the SSR holdings during 2018, see the online version of this article in the Articles section of the SSR website (www.stocksuperstars.com/portfoliocorner/). •

Performance by Group RiskSSR Group 2018 2017 IndexGroup 1: Profitability & Rela�ve Strength 5.5 20.2 1.61Group 2: Value & Financial Strength -9.4 16.8 1.02Group 3: GARP Revisions -17.7 0.5 1.16Group 4: Reasonably Priced Growth -19.5 34.6 1.30SSR Por�olio -10.8 18.0 1.11Best-Performing SSR Stocks of 2018 2018 2017 Rsk IdxDomino's Pizza (Group 1: DPZ) 55.0 19.9 2.29Burlington Stores Inc. (Group 1: BURL) 32.2 45.2 2.10KMG Chemicals, Inc. (Group 3: KMG) 29.3 na naPfizer (Group 2: PFE) 24.7 15.5 1.30Weakest-Performing SSR Stocks of 2018 2018 2017 Rsk IdxWestern Digital (Group 3: WDC) -45.1 na 3.75Apogee Enterprise (Group 4: APOG) -40.1 na 2.46Tower Semiconductor (Group 4: TSEM) -39.5 58.3 3.68D.R. Horton (Group 4: DHI) -31.3 89.0 2.15*Internal rate of return of security while it was held in the SSR tracking por�olio. Data as of 12/31/2018.

Total Return (%)*

Best and Worst SSR Performers for 2018

Documents

The Stock Superstars Report illustrates how to build and ...€¦ · of automotive aftermarket parts, tools, supplies, equipment and accessories in the U.S. The com-pany sells its